Martinez Inc. issues 500 shares of $1 par value common stock and 100 shares of $10 par value preferred stock for a lump sum of $118,000. The market price of the common shares is $180 each and market price of the preferred is $225 each. Which journal entry is correct to report the issuance?  

Which of the following best describes a possible result of treasury stock transactions by a corporation?

Buffet Company issued $300,000 of 10% bonds on January 1, 2020, due on January 1, 2030, with interest payable each July 1 and January 1.  The bonds were issued for $266,526, at an effective interest rate of 12%. What is the carrying value on December 31, 2020 after all accruals have been made?

You may use a calculator.  You may not use your cell phone as a calculator.  This is a closed book exam.  You may not keep any part of the exam.  You may not consult with other people or other sources.   You may not use notes, text, homework, or any other references. You may not communicate with others about the content of this exam. You may use one piece of scratch paper. It must be clean at the beginning. You must show both sides of the scratch paper to the screen before you begin, and each side must be demonstrably clean. Sometimes I use picture files in either the stem or a response.  If the pictures do not show up for you then here are two possibilities: 1. A simple reload of the page: control-R or command-R on macs 2. Or, control-shift-R (or command-shift-R on macs) Click on “I agree” if you agree to the honor code. “As a Mississippi State University student I will conduct myself with honor and integrity at all times. I will not lie, cheat, or steal, nor will I accept the actions of those who do.”

At the date of declaration of a small common stock dividend, the entry should not include

A liability has three essential characteristics; which of the following is not one of them? 

Edmonds Company has bonds with a carrying value of $310,000 as of December 31, 2020, and Edmonds has chosen the fair value option for these bonds. At December 31, 2020, the value of the bonds is now $280,000 because interest rates in the market have increased.   What is the financial statement effect of the fair value adjustment?  

When a bond is purchased, the present value of the bond’s expected net future cash inflows discounted at the market rate of interest provides what information about the bond?

On January 1, 2020, Wildcat Oil Company erected an oil platform in the Gulf of Mexico. Wildcat is legally required to dismantle and remove the platform at the end of its useful life, estimated to be five years. Wildcat estimates that dismantling and removal will cost $1,000,000. Based on a 10 percent discount rate, the present value or fair value of the asset retirement obligation is estimated to be $620,920. Based on this information, what expenses will Wildcat Oil report for the year, 2020?  

Susan would like to organize ABC as either an LLC (taxed as a sole proprietorship) or a C corporation.  In either form, the entity is expected to generate an 11 percent annual before-tax return on a $300,000 investment. Susan’s marginal income tax rate is 35 percent and her tax rate on dividends and capital gains is 15 percent. Susan will also pay a 3.8 percent net investment income tax on dividends and capital gains she recognizes. If Susan organizes ABC as an LLC, Susan will be required to pay an additional 2.9 percent for self-employment tax and an additional .9 percent for the additional Medicare tax.  Further, she is eligible to claim the full deduction for qualified business income.  Assume that ABC will pay out its all of its after-tax earnings every year as a dividend if it is formed as a C corporation. a) How much cash after-taxes would Amanda receive from her investment in the first year if ABC is organized as either an LLC or a C corporation?   b) What is the overall tax rate on ABC’s income in the first year if ABC is organized as an LLC or as a C corporation?